Financial Daily from THE HINDU group of publications
Tuesday, Nov 18, 2003
Financial Daily from THE HINDU group of publications Tuesday, Nov 18, 2003 |
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Info-Tech
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Regulatory Bodies & Rulings TRAI looking at feasibility of spectrum trading G. Rambabu
New Delhi , Nov. 17 IN a path-breaking development, the Telecom Regulatory Authority of India (TRAI) is examining the feasibility of allowing wireless telecom operators to "trade" in the radio frequency spectrum allotted to them, enabling them to either sell or lease it to another operator in the same circle. The concept of "spectrum trading", which is yet to kick off in the US and is being deliberated in the European Union, would lead to more efficient use of radio frequency, which is a scare resource. It would also help the wireless operators to provide better service to their subscribers, which they claim is being hindered by a lack of adequate spectrum. According to official sources, this proposal is being examined by the Authority, which is in the process of bringing out a consultation paper on pricing of spectrum and its related issues. The concept has been suggested by McKinsey in its report to the TRAI. They pointed out that in each circle of operation, the wireless operators (both GSM and CDMA) have been allotted a limited frequency band. In such a situation, a service provider who is underutilising his allotted frequency can either sell or lease it off to another operator in the same circle who has the requirement for more spectrum. This would eliminate the need to approach the Department of Telecommunications (DoT), whereby the service providers can negotiate amongst themselves. At present, the existing three GSM cellular operators (including MTNL & BSNL) have been allocated spectrum in 890-915 MHz paired with 935-960 MHz band. The fourth cellular operators have been allotted spectrum in 1710-1785 MHz, paired with 1805-1880 MHz bands. The allotted spectrum varies from 4.4+4.4 MHz to 10+10 MHz depending upon the number of subscribers in each service area. Existing unified licence operators who utilise the CDMA technology (such as Reliance Infocomm and Tata Teleservcies) have been allocated 5+5 MHz in 824-844 MHz paired with 869-889 MHz bands on a first come first serve basis. The same principle is to be followed for allocation of additional frequency to them in the 1880-1900 MHz band at a later date. In its report, McKinsey has pointed out that since GSM cellular operators can get up to 10 MHz of spectrum as part of their licence, the CDMA operators who have migrated to the unified licence should also be given 10 MHz. This would imply that Reliance and Tata Teleservices should get an additional 5 MHz. However, the TRAI has ruled it out and is instead working out a pricing mechanism for any additional spectrum that will be released. In this context, allowing "trading" is also being evaluated. Although the proposal is still in a preliminary stage, the sources noted that allowing secondary trading of radio spectrum for wireless telephony would create the much-needed flexibility in the trading of a limited resource. It could also enable operators to bring out new services more efficiently by cutting out the Government, which can be a time consuming process.
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